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The Anatomy of an OPM. Part 1. Deconstructing the Online Program Management Model. How we got here, where it’s at and where it might head.
www.holoniq.comFebruary 2019
CLIENT ONLY RESEARCH NOTE
EXTRACT ONLY
WHO WE ARE
We are building the world's smartest source of global education intelligence to power decisions that matter.
2www.holoniq.com
THE ANATOMY OF AN OPM
Table of ContentsExecutive Summary 5
OPM Market Map 6
Top Players 7
OPM Transactions 8
Key Issues 9
OPM Scenarios for 2030 10
Scope 11
What is an OPM? 12
Zooming Out. How did we get here? 13
The very first OPM 14
How many students are we talking? 15
US Postsecondary Online Landscape 16
What do online students' study? 17
Physical proximity and blending offline 18
Market Sizing 19
Global Market Sizes 20
Global OPM Market 21
OPM Business Model 22
Business Model Canvas 23
Key Partners 24
Activities & Resources 25
Value Proposition 26
Customers 27
Costs 28
Revenue Models 29
Segment Profiles 30
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This report is an executive briefing on innovation and technology in the global education market.
This report is issued by HolonIQ to clients only. It is for general informational purposes and is not guaranteed as to accuracy or completeness. The analysis and forecasts are subject to change without notice. All figures are in USD unless otherwise stated. HolonIQ does not accept any liability arising from the use of this report. For more information and press enquiries please contact [email protected].
Copyright 2019 HolonIQ. All rights reserved. Intended for recipient only and not for further distribution or web loading without the consent of HolonIQ.
THE ANATOMY OF AN OPM
Global OPM Market MapThe global Online Program Management market is composed of four major segments based on focus, model and vertical.
GENERALIST SPECIALIST MOOC AS OPM UNIVERSITY AS OPM
6Source: HolonIQ Feb 2019
THE ANATOMY OF AN OPM
Top OPM Transactions
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10 years of OPM investments and acquisitions.
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Acquired by Pearson for $650m in 2012
Acquired by Grand Canyon for $362m
$300m Post IPO equity raise
Acquired by Wiley for $200m
$119m IPO equity raise
Venture Capital
M&A
IPO & Equity Markets
$230m Majority/Controlling Investment
$50m Investment
$63m Investment
$105m Investment
Acquired by Wiley for $220m in 2012
$64m Investment
$14m Investment
$35m Investment
$61m Investment
USD Millions
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THE ANATOMY OF AN OPM
OPM Scenarios for 2030 #1. PPP OLIGOPOLY
The OPM sector matures, develops as an industry standard and spawns professional bodies.
A few OPM giants dominate the market, consolidating a long-tail of smaller sub-scale operators. Eventually, global giants like publishers and technology companies in turn acquire OPM’s, offering a deeper and broader suite of services to universities.
#2. UNIVERSITY NETWORK
University networks form to develop centralized public alternatives to OPM services.
Drawing on existing university or disciplinary alliances and networks (e.g. Ivy League, Asian University Alliance, Universitas 21, Russell Group) universities and colleges team up to build their own specialist ‘network-insource’ services.
#3. OPM UNBUNDLING
The OPM market is highly competitive, with many providers delivering mostly fee for service and increasingly commoditized offerings.
Universities maintain control over the value chain and key activities, resist bundled options and partner with many providers offering specialist services.
#4. UNIVERSITY D.I.Y
Universities build their own in-house capabilities by developing new internal OPM-like service functions and hiring staff from OPM providers.
Upfront capital required is re-routed from new building works as university online income continues to grow. OPM market growth slows as skills transfer happens across the sector.
Consolidation
Fragmentation
Out
sour
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While there are a range of views on the shape that the OPM market might take over the next 10 years, there are also emerging trends providing directional signals, which have been shaped into 4 OPM Scenarios for 2030.
We are collecting expert views on the likelihood of each of these four scenarios and would greatly appreciate your perspective. It only takes 1 minute. Visit bit.ly/opm2030.
Our initial scenarios are based on two of the most discussed OPM dimensions.
First, will Universities embrace the OPM and continue to ’outsource’ the capabilities and resources OPMs offer, or will they seek to build those capabilities in-house and manage the entire online spectrum over the long-run?
Second, will online higher education consolidate towards an oligopoly of global giants, akin to the broader technology sector or are we more likely see a highly disbursed and fragmented market of ‘suppliers’ that represent vendor relationships more than partnerships?
This first round of feedback will inform a second iteration of 4 OPM Scenarios for 2030.
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THE ANATOMY OF AN OPM
US Online Postsecondary EnrolmentsTop US Institutions by Total ‘Exclusively Distance’ Enrolments 2012-2017 in ‘000s. Top 100 enrols 1 in 2 students, the Top 20 institutions enrol 1 in 3 students and the top 10 enrols 1 in five.
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Sum of all remaining Institutions
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Momentum
US Contracts accumulating
Rest of World experimentation
Ramp UpUS Enrolments Picking Up
Rest of World Momentum
Maturing
1.1 1.2 1.51.8
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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
US ROW
THE ANATOMY OF AN OPM
Global OPM Market Size
While universities are developing their own online learning capabilities, OPM’s with full-service-fully integrated offerings maintain a strong value proposition.
Alternatively, and the trend we see currently in the market, OPM’s can choose to offer unbundled, fee for service models, picking up those institutions who just need to plug gaps in their expertise or solve specific problems.
There seem to be a number of paths to growth for OPM’s, including the organic growth of online HE enrolment, services to corporate partners who wish to take training online, geographical expansion into other markets with the inevitable acceptance of online learning, and horizontal integration of services such as coaching, enrolment, recruitment, retention and career services.
Total Global OPM Revenue, USD Billions
Source: HolonIQ Smart Estimates
The size of the global OPM market stands at $3b+ with 60+ OPMs worldwide. An increasing acceptance of online learning sees more universities launching online degrees, with the OPM market expected to reach $7.7b by 2025.
19%CAGR
14%CAGR
1.4 1.61.9
2.32.8
3.3
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WHERE DOES THE DATA COME FROM?
HolonIQ clients use our data and insights to make better data-driven decisions.
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